Sean and John,
I spent about 30 minutes on the phone with Ameritrade about the CHL puts I sold. The 32.5 strike CHL puts for my expiry have no current active orders, so the Bid and Ask prices shown in my account defaulted to $0 and $100. The options price is calculated as half way between the Bid and Ask which in this case is $50. Prior to yesterday the price was about $6/option contract. So the huge loss shown was assuming I bought back the 3 options to close at $50 per contract, instead of the recent $6. So the $50 price isn’t an actual bid/ask out there on the market. That’s the good news. The bad news is that they couldn’t tell me whether these shares could be put to me at a later date. So if I can’t buy out of them due to lack of buyers, what happens? Now if no one puts these shares to me, then problem solved, but I’m not sure what happens if I do get them and when. If they do get put to me after August 2 (I’m not sure what this date is but they said that I could settle the options up to that date), then how would I get rid of them if I can’t trade them or how can someone put them to me if they can’t trade them either ? They couldn’t answer, but they hope to get more clarification in the upcoming weeks, so I put in a limit order to buy to close them out at the price where they were trading yesterday ($6.40) and will call them back in the next week to see if they have any answers. It seemed like I was the first person to ask about all of this so we’ll see where it goes from here.
- This reply was modified 1 week, 4 days ago by Andrew Graham.